According to data from the FDIC and NAHB analysis, the outstanding stock of 1-4 unit residential construction loans made by FDIC-insured institutions rose by $2.167 billion during the third quarter of 2015, a quarterly increase of 3.9% to a total stock of $58.3 billion.

On a year-over-year basis, the stock of residential construction loans is up 16.5% from the third quarter of 2014, as indicated by the red bars in the graph below. The current reading marks the sixth consecutive quarter of year-over-year growth in the range of 16% to 17.5%.

Since the first quarter of 2013, the stock of outstanding home building construction loans has grown by 43%, an increase of $17.5 billion.

It is worth noting the FDIC data represent only the stock of loans, not changes in the underlying flows, so it is an imperfect data source. Nonetheless, the consistent growth in the outstanding stock of AD&C loans is a positive development. NAHB surveys of builders also suggest improving lending conditions, although recent Fed survey data indicates some tightening for commercial real estate lending purposes.

Lending remains much reduced from years past. The current stock of existing residential AD&C loans now stands 71.4% lower than the peak level of residential construction lending of $203.8 billion reached during the first quarter of 2008.

The FDIC data reveal that the total decline from peak lending for home building construction loans continues to exceed that of other AD&C loans (nonresidential, land development, and multifamily). Such forms of AD&C lending are off a smaller 53% from peak lending. This class of AD&C loans has now registered nine quarters of expansion (4.1% for the third quarter of 2015).

Despite the steady increases in residential AD&C lending, there exists a lending gap between home building demand and available credit. This lending gap is being made up with other sources of capital, including equity, investments from non-FDIC insured institutions and lending from other private sources, which may in some cases offer less favorable terms for home builders than traditional AD&C loans.